Microchip, On 'disappointed' with Atmel bid

SAN JOSE, Calif. -- Microchip Technology Inc. and On Semiconductor Corp. said that they are ''disappointed'' with Atmel Corp.'s rejection of a proposed takeover bid.

As reported, Microchip and On Semiconductor are combining forces in an attempt to acquire Atmel in a deal that values the latter at $2.3 billion. Microchip is leading the initiative, and the deal would in part be financed by the sale of Atmel's nonvolatile memory and RF and automotive businesses to On Semiconductor.

After Atmel rejected their offer Microchip and On Semiconductor said they will consult with their respective boards and advisors and will determine their next steps in due course.

Meanwhile, On Semiconductor said that total revenues in the third quarter of 2008 were a record $581.5 million, an increase of approximately 3 percent from the second quarter of 2008. During the third quarter of 2008, the company reported GAAP net income of $61.2 million, or $0.15 per share on a fully diluted basis.

''Based upon product booking trends, backlog levels, manufacturing services revenues and estimated turns levels, we anticipate that total revenues will be approximately $500 to $550 million in the fourth quarter of 2008,'' said Keith Jackson, On Semiconductor's president and CEO, in a statement.

''Over the last several weeks, we have seen a dramatic appreciation of the U.S. dollar. This change in currency negatively impacts our revenues by approximately $10 million sequentially or approximately 2 percent and is already embedded in our overall revenue guidance,'' he said. ''Backlog levels at the beginning of the fourth quarter of 2008 were down from backlog levels at the beginning of the third quarter of 2008 and represent over 95 percent of our anticipated fourth quarter 2008 revenues. We expect that average selling prices for the fourth quarter of 2008 will be down approximately two percent sequentially.''